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Capacity at the planned new Grafton jail will also be lifted from 1000 to 1700, while a long-term infrastructure plan will expand existing correctional precincts.

Corrective Services NSW Commissioner Peter Severin said the department was forecasting "a capacity in excess of 18,000 beds" by 2020, including beds that aren't being used.

"I hope we can switch off as many of the obsolete beds to bring the capacity down," Comm Severin said.

He said he was confident the funding boost would help deal with growing prison numbers.

Shadow Minister for Corrections, Guy Zangari, however criticised the government for allowing prisons to reach capacity.

"After closing down prisons across the state they're desperately playing catch up to try and curb the prisons crisis they've inflicted on NSW," he told AAP.

The funding would be better spent on justice reinvestment programs aimed at keeping people out jail in the first instance, Greens MP David Shoebridge said.

"Reducing crime requires a commitment to long-term justice reinvestment that spends scarce tax dollars on better schools, healthcare and social services, not just more and more jails and police," he said.